As risks spread from energy to fertilizers and other critical agricultural inputs –not to mention financial markets – three international organizations illustrate how deeply the US-Israeli war on Iran is affecting global markets.

A statement by the World Bank, a report by the Organization for Economic Cooperation and Development ( OECD ), and a press briefing by the Food and Agricultural Organization ( FAO ) of the United Nations all came on March 26.

In Washington, the World Bank notes that oil prices jumped almost 40% between February and March.  Other price increases were even steeper – almost two-thirds for liquefied natural gas ( LNG ) shipments to Asia and nearly 50% for nitrogen-based fertilizers.

“The longer this lasts, and the more damage there is to critical infrastructure, the more challenging this will be,” the bank says.

G20 inflation

In Paris, the OECD warns in an interim report on its economic outlook that "a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation”.

G20 inflation alone is projected to be 1.2 percentage points higher than previously expected.

 “Volatility in financial markets has picked up, particularly in some Asian economies,” the report says. “Higher energy prices and supply-chain disruptions come at a time when inflation remains above target in a few major economies.”

Assuming that oil, gas and fertilizer prices fall gradually from mid-2026 onwards, the OECD projects global GDP growth to ease to 2.9% in 2026 before edging up to 3.0% in 2027.

“A significant downside risk to the outlook is that persistent disruptions to exports from the Middle East that raise energy prices even further than assumed,” it says. “On the upside, a surprisingly resilient business sector, an earlier-than-assumed resolution of the conflict … could push growth higher.”

Central bank vigilance

The OECD is urging central banks to “remain vigilant and ensure that inflation expectations stay well anchored".

Noting “limited” fiscal space, government measures “should be timely, well-targeted on households most in need and viable firms, preserve incentives to lower energy use and have clear expiry mechanisms”.

“Effective monitoring, supervision, and robust regulatory policies are needed to address financial stability risks,” it says.

As for global commerce – now under scrutiny at the biennial ministerial conference of the World Trade Organization that opened in Yaounde last  Thursday – “agreements to ease trade tensions and deepen trade relations would improve policy certainty and strengthen the prospects for sustainable growth.

“New export restrictions in response to supply disruptions should be avoided, as these could exacerbate supply shortages and push up prices.”

In the medium term, the OECD recommends improving domestic energy efficiency and cutting reliance on imported fossil fuels as policy priorities.

‘Systematic shock’

Over in New York, FAO chief economist Máximo Torero warned on the same day that the disruption to the Strait of Hormuz is triggering one of the most severe shocks to global commodity flows in recent years.

Speaking at a UN daily press briefing, he said the disruption has significant implications for food security, agricultural production, and global markets. “This is not only an energy shock. It is a systematic shock affecting food systems globally.”

According to the FAO, the Gulf region accounts for nearly half of the world’s trade in sulphur – a critical input to produce sulphuric acid for processing phosphate rock into fertilizers. “Disruptions to sulphur supply risk fracturing global phosphate fertilizer production,” the agency says.

Since the first week of March, fertilizer prices have risen sharply, with Middle East granular urea climbing 19% and Egyptian urea prices surging 28%. According to FAO projections, global fertilizer prices could average 15% to 20% higher in the first half of 2026 if the crisis persists.

“Farmers are facing a dual cost shock,” says Torero. “They have more expensive fertilizers alongside rising fuel costs affecting the entire agricultural value chain, including irrigation and transport.”

Food stocks ‘currently sufficient’

The FAO says global food stocks are “currently sufficient” and that markets could stabilize in about three months. “But if the disruption persists for three months or longer, risks escalate significantly, affecting global planting decisions for 2026 and beyond,” the UN agency says.

Under a medium-term disruption scenario, the FAO expects reduced yields for fertilizer-intensive crops such as wheat, rice, and maize, crop substitution towards nitrogen-fixing crops such as soyabeans, and increased competition from biofuel production.

In the short term, “it is critical to establish alternative trade corridors, provide emergency financial support to import-dependent countries, and ensure farmers have access to credit”, the FAO says.

Diversification urged

"In the medium term, countries need to diversify fertilizer import sources, strengthen regional reserves, and avoid export restrictions.

“In the long term, FAO recommends investing in sustainable, input-efficient agriculture, scaling alternative fertilizer technologies such as green ammonia, and treating food systems as strategic infrastructure."

The World Bank is reassuring member countries that it’s offering assistance.

“Our aim is to deliver immediate relief by leveraging our active portfolio, our crisis response toolkit, and pre-arranged financing facilities,” it says.

“We will transition progressively to fast-disbursing instruments anchored in sound policies to underpin recovery. Through our private sector arms, we will provide firms with essential liquidity, trade finance, and working capital.”

According to the FAO, the most vulnerable countries in terms of agriculture are Bangladesh, Egypt, India, Kenya, Mozambique, Sri Lanka, Somalia, Sudan and Tanzania.

“Major agricultural exporters such as Brazil may also face production impacts, with potential spillovers into global markets,” it adds.